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The effect of crises on firm exit and the moderating effect of firm size

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  • Amorim Varum, Celeste
  • Rocha, Vera Catarina
Abstract
The liability of smallness assumption suggests that smaller firms face higher exit risks. However, does it apply during crises? We show that during downturns size reduces firms’ exit risk by less; the hazard rate increases more rapidly in size.

Suggested Citation

  • Amorim Varum, Celeste & Rocha, Vera Catarina, 2012. "The effect of crises on firm exit and the moderating effect of firm size," Economics Letters, Elsevier, vol. 114(1), pages 94-97.
    • Handle: RePEc:eee:ecolet:v:114:y:2012:i:1:p:94-97
    DOI: 10.1016/j.econlet.2011.09.015
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    7. M. Grazzi & C. Piccardo & C. Vergari, 2017. "Building a firm level dataset for the analysis of industrial dynamics and demography," Working Papers wp2003, Dipartimento Scienze Economiche, Universita' di Bologna.
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    11. Varum, Celeste & Rocha, Vera Catarina & Valente da Silva, Hélder, 2014. "Economic slowdowns, hazard rates and foreign ownership," International Business Review, Elsevier, vol. 23(4), pages 761-773.
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    20. Jarle Aarstad & Stig-Erik Jakobsen & Arnt Fløysand & Olav Andreas Kvitastein, 2024. "Governmental Revenue Compensation during COVID-19: Did Firm Resources and Institutional Factors Explain Who Received It?," Tourism and Hospitality, MDPI, vol. 5(3), pages 1-14, August.
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    More about this item

    Keywords

    Survival; Hazard; Firm size; Crisis; Manufacturing; Portugal;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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